CARTHAGE  Metro Paper Industries has laid off 10 full-time temporary workers during the past two weeks, slicing its staff to 57 permanent and temporary employees. And the Toronto-based company plans to make more cuts at the 695 West End Ave. mill, downsizing its staff to anywhere from 35 to 40 permanent employees.

The company also moved three of its 10 paper converting lines to its Toronto headquarters this month, Metro workers said Friday. More machinery is expected to be moved from the plant this year, according to a memo the company sent June 6 to economic development agencies.

Three agencies each contributed $250,000 toward a $750,000 sink-or-swim loan in the summer of 2008, which the company used to help fund a $2.8 million expansion project needed to keep the Carthage mill open. Signing off on the loan were the Carthage Economic Development Corp., Jefferson County Industrial Development Agency and Development Authority of the North Country.

At that time, the company threatened to relocate the mill if it didnt acquire the loan. After approving the loan, agency officials praised the move for retaining jobs in the community that otherwise would have been lost. When the expansion was completed in January 2009, Metro hired 35 employees to increase its staff to 85.

Now five years later, the company said its plan to downsize is needed to counteract plummeting revenue this year. Metro lost $390,000 from January through May, according to the June interagency memo.

Downsizing is the only option the company has left to keep the Carthage mill open.

Should this last-ditch effort fail, well have no option but to close the plant permanently, the memo reads.

Oliver Moraes, Metros vice president of finance in Toronto, did not return a call Friday seeking comment.

So far, Metro has made good on its loan payments to the agencies, said John F. McHugh, Carthage community development coordinator. It still owes about $412,000, just over $137,000 to each agency. As collateral for the loan, agencies have a claim on four pieces of machinery worth a total of $1.4 million that Metro installed during its expansion. Because the agencies have a claim on that machinery, Mr. McHugh said, it cannot be moved to Metros Toronto headquarters.

Wed have to review that against the balance owed on the loan, he said.

Meanwhile, he said, the agencies have agreed to support the company as it downsizes the mill to make operations sustainable.

Theyve indicated to us theyre having a challenging time at this plant with regard to profitability, Mr. McHugh said. We have a company thats trying to downsize so they can remain viable, and were going to work with them to do that. Some jobs are better than no jobs at the mill.

On Friday, workers at the mill shared concerns about the company during an afternoon break.

There are about 15 people here that arent on permanent jobs right now, said Charles Ennis, a baler operator whos worked five years at the mill and is a permanent worker. Theyre floating around to different machines every day.

With the three machines gone, Mr. Ennis said, the seven remaining paper converting lines at the mill are used to make toilet paper, facial tissue, napkins, paper towels and dispenser rolls. About 10 full-time temporary employees still work at the plant, he said, but the remainder are permanent workers. The Herrings resident is worried the plant might close because of reduced production here.

I think theyre finding it more feasible to do work in Toronto, he said.

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